HB 553-FN-A – AS INTRODUCED
2005 SESSION
08/10
HOUSE BILL 553-FN-A
AN ACT relative to a state tax on large lottery winnings.
This bill creates a state tax on large lottery winnings.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05-0323
08/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT relative to a state tax on large lottery winnings.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Lottery Tax. Amend RSA 284:21-r to read as follows:
284:21-r Winnings Tax Exempt; Exception. [Notwithstanding any other provisions of law to the contrary]
I. Except as provided in paragraph II, a recipient of any money or prize awarded pursuant to the provisions of RSA 284:21-i shall be exempt from any tax imposed thereon, by the state of New Hampshire.
II. A tax is imposed at the rate of 10 percent upon all lottery winnings in excess of $5,000. The lottery commission shall collect the tax prior to paying the proceeds to the winner by withholding an amount from federal income tax payable to the Internal Revenue Service equal to the amount of state tax imposed by this paragraph. The commission shall remit the tax to the state treasurer. Fifty percent of the collected revenue shall be deposited in the New Hampshire land and community heritage investment trust program under RSA 227-M:7, and the remainder shall be deposited in the general fund.
2 Effective Date. This act shall take effect July 1, 2005.
LBAO
05-0323
1/28/05
HB 553-FN-A - FISCAL NOTE
AN ACT relative to a state tax on large lottery winnings.
FISCAL IMPACT:
The Lottery Commission has determined this bill will increase state general fund revenue by $3,196,462 in FY 2006 and each year thereafter and will increase state restricted revenue by $3,196,462 in FY 2006 and each year thereafter. There will be no fiscal impact on county and local revenue or state, county, and local expenditures.
METHODOLOGY:
The Commission states this bill will impose a tax of 10% upon all lottery winnings in excess of $5,000. The Commission states in 2004 total prizes over $5,000 paid out was $63,929,235. A 10% tax on $63,929,235 of lottery winnings would increase state revenue by $6,392,924. This bill would deposit 50% of the revenue, $3,196,462, in the NH Land and Community Heritage Trust Fund, and the remaining $3,196,462 in the general fund.
The Lottery Commission states language included in this bill regarding withholding an amount equal to the state tax from federal income tax payable to the Internal Revenue Service may not be allowed under Internal Revenue Service guidelines.